Nvidia (NASDAQ:NVDA) stock is on a stellar bull run, thanks to investors’ positive outlook on generative AI (Artificial Intelligence) and its dominant positioning in that space. Given the optimism, Nvidia briefly became the first chip company to achieve $1 trillion in market cap. While NVDA has appreciated a lot, the stock of C3.ai (NYSE:AI), an enterprise AI application software company, dwarfed NVDA with its returns on a year-to-date basis.
NVDA stock is up about 174% year-to-date. At the same time, C3.ai stock has surged nearly 293%. The uptrend in C3.ai stock is supported by the launch of its generative AI product suite following the success of OpenAI’s ChatGPT.
C3.ai is expanding its generative AI product suite on marketplaces, including Amazon’s (NASDAQ:AMZN) AWS and Alphabet’s (NASDAQ:GOOGL)(NASDAQ:GOOG) cloud. Moreover, it announced that its generative AI product suite drew interest from new and existing customers. It signed three new generative AI application agreements with large enterprises in the fourth quarter. Furthermore, it closed 43 deals during the same period.
C3.ai will report its Q4 financial results today after the market closes. The company earlier stated that it expects Q4 revenues to be in the range of $72.1-$72.4 million, which is higher than the Street’s forecast of $71.32 million. However, the company’s top line could remain flat compared to the prior-year quarter.
While C3’s management remains upbeat and expects to achieve profitability by the end of Fiscal 2024, the company projects it will report an adjusted operating loss in the range of $23.7 to $23.9 million in the fourth quarter. Q4. Wall Street analysts expect it to post a loss of $0.17 per share in Q4, which reflects an improvement from the loss of $0.21 in the prior-year quarter.
What is the Future of C3.ai Stock?
The growing adoption of generative AI and the large addressable market for enterprise AI will likely support C3.ai stock. However, analysts remain on the sidelines due to the recent rally in its share price and the company’s ongoing transition to a consumption-based pricing model.
It has three Buys, four Holds, and four Sells for a Hold consensus rating. Further, analysts’ average price target of $20.50 implies 53.36% downside potential from current levels.